Refer GST Bill to select committee: AP to Centre

Dated 21st November, 2015

Taking strong exception to 'usurping' of financial powers of states, the Andhra Pradesh government on Friday requested the Centre to refer the Goods and Services Tax (GST) Bill to a select committee. 

Speaking at the GST empowered committee meeting in Delhi on Friday, AP finance minister Yanamala Ramakrishnudu pointed out that the suggestions given by various state governments on the 122nd constitutional amendment need to be examined by the select committee. 

The AP government's insistence may further delay the passing of the GST Bill in the ensuing Parliament session. If the bill is referred to the select committee, the Centre may not be in a position to pass the bill during the winter session. 

"From the Government of India's views it appears that it wants to go ahead with the Constitutional Amendment Bill, disregarding even the meaningful views and suggestions raised by states. The views or explanations of the additional secretary, GoI, as contained in the minutes of the latest meeting, are not convincing and our state is not in agreement with those views. The state of AP would like to reiterate that the Constitutional Amendment Bill, introduced in Parliament, does not have any provision for GST Compensation Fund," Yanamala said. 

He also insisted that veto power granted to the Centre should be withdrawn and the weightage of state governments in the GST council should be increased from proposed 2/3rd to 3/4th of votes cast, so that the financial powers of the states are not curtailed by the Centre. 

"Even though all the states unanimously agree on certain issues, the Centre can veto it. On the other hand, the Union government, even without the support of many states, can get majority in terms of weighted votes and will be able to impose any decision, as it pleases, on the states in the GST Council," the minister pointed out. 

He also said that AP will suffer a revenue loss of Rs 700 crore per annum with the implementation of GST. He sought exemption of tobacco products from GST so that states also have power to levy taxes based on the demand. Yanamala raised an objection to the definition of 'service' and requested the Centre to re-examine the definition to make it more realistic. 

The finance minister requested the Centre to release the balance amount of Rs 1,230.82 crore due to the residual state of Andhra Pradesh for 2011-12 as central sales tax (CST) compensation at the earliest.

(This article is published in The Times of India on 21 Nov, 2015)